Storus Corp. v. Aroa Marketing Inc.

CASE HISTORY and DISPOSITION: Action by Storus Corp. against Aroa Marketing Inc. and SkyMall Inc., what is ed alleging trademark infringement and other claims. On plaintiff’s motion for partial summary judgment as to defendants’ liability on trademark claim. Granted in part and denied in part.

HEADNOTES:
TRADEMARKS AND UNFAIR TRADE PRACTICES

[**1H] Types of marks — Secondary meaning (327.02)

Types of marks — Descriptive — Particular marks (327.0303)

Plaintiff is granted summary judgment that it owns valid, protectable trademark in term “Smart Money Clip” for combination money clip and card holder, since plaintiff holds federal registration for mark, since defendants have not shown that “smart” is understood as “generally laudatory” descriptive term, or explained how it is descriptive of product having ability to hold cash and credit cards simultaneously, and since, even if it is assumed that mark is descriptive in nature, defendants have offered no evidence that mark lacks secondary meaning.

Plaintiff is granted summary judgment that defendant’s use of plaintiff’s “Smart Money Clip” trademark, for combination money clip and card holder, in keyword advertisement on [*1033] Internet is likely to cause initial interest confusion, since defendant uses mark identical to plaintiff’s mark to sell same type of product, and both parties market their products over Internet, since reference in advertisement to defendant’s “Steinhausen” mark, even assuming that it dispels confusion as to source, does not preclude finding of initial interest confusion, since plaintiff has presented evidence showing that more than 1,000 searches using its mark were in fact diverted to defendant’s Web site, since plaintiff has offered evidence that defendant had actual knowledge of plaintiff’s mark before adopting “smart money clip” as keyword, and since defendant has failed to make strong showing that remaining factors weigh against finding of likelihood of confusion.
Plaintiff is denied summary judgment that defendant’s use of phrase “smart money clip” in description of product offered for sale on defendant’s Web site is likely to cause initial interest confusion with plaintiff’s “Smart Money Clip” trademark for combination money clip and card holder, since defendant has not conceded that consumer who enters term “smart money clip” in search engine for defendant’s site would be directed to page containing description of defendant’s competing product, since it is undisputed that defendant’s Web page previously included words “smart money clip,” but there is no evidence, or at best triable issue, as to whether defendant’s search engine would direct consumer using search term “smart money clip” to that page, and since there is no evidence that, at present time, Web page advertising defendant’s competing product contains phrase “smart money clip.”

Before the Court is plaintiff Storus Corporation’s (“Storus”) Motion for Partial Summary Judgment of Trademark Infringement, filed December 28, 2007. Defendants Aroa Marketing, Inc. (“Aroa”) and Skymall, Inc. (“Skymall”) have jointly filed opposition, to which Storus has replied. Having read and considered the papers filed in support of and in opposition to the motion, the Court rules as follows. n1

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n1 By order filed February 7, 2008, the Court took the matter under submission.

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BACKGROUND

Storus has marketed and sold a money clip under the mark “Smart Money Clip” since 1997. ( See Kaminski Decl., filed December 28, 2007, Para. 4.) Said money clip is covered by a patent owned by Storus, specifically, by United States Patent 6,082,422, ( see id. Paras. 2, 4), which patent “relates to a combination money clip and card holder adapted to retain paper currency as well as [to] removably store flexible cards, e.g., credit cards, and sized to be conveniently carried in a pocket or purse,” ( see id. Ex. C at col.1, ll. 17-21). Storus sells the Smart Money Clip through “various retail channels, including internet stores, and mail order catalogs, brick and mortar’ stores and television shopping channels.” ( See id. Para. 5.) n2

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n2 Defendants do not dispute any of the facts set forth in the preceding paragraph.

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In its First Amended Consolidated Complaint, Storus alleges, as its Sixth Claim, that defendants have infringed Storus’ mark Smart Money Clip by using said mark in connection with sales of products that compete with Storus’ money clips. By the instant motion, Storus seeks partial summary judgment on the issue of defendants’ liability as to the Sixth Claim. Specifically, Storus asserts, the manner in which defendants have used the mark “Smart Money Clip” in connection with a “search engine” creates “initial interest confusion with Storus’ trademark.” ( See Pl.’s Mot. at 9:26-27; 11:2-10.) [*1034]

LEGAL STANDARD

Rule 56 of the Federal Rules of Civil Procedure provides that a court may grant summary judgment “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” See Fed. R. Civ. P. 56(c).

The Supreme Court’s 1986 “trilogy” of Celotex Corp. v. Catrett , 477 U.S. 317 (1986), Anderson v. Liberty Lobby, Inc. , 477 U.S. 242 (1986), and Matsushita Electric Industrial Co. v. Zenith Radio Corp. , 475 U.S. 574 (1986), requires that a party seeking summary judgment show the absence of a genuine issue of material fact. Once the moving party has done so, the nonmoving party must “go beyond the pleadings and by [its] own affidavits, or by the depositions, answers to interrogatories, and admissions on file,’ designate specific facts showing that there is a genuine issue for trial.'” See Celotex , 477 U.S. at 324 (quoting Rule 56(c)). “When the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita , 475 U.S. at 586. “If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted.” Liberty Lobby , 477 U.S. at 249-50 (citations omitted). ” [I]nferences to be drawn from the underlying facts,” however, “must be viewed in the light most favorable to the party opposing the motion.'” See Matsushita , 475 U.S. at 587 (quoting United States v. Diebold, Inc. , 369 U.S. 654, 655 (1962)).

DISCUSSION

As noted, Storus seeks partial summary judgment on its claim for trademark infringement. To establish a trademark infringement claim, the plaintiff must establish that the defendant has used a mark “confusingly similar to a valid, protectable trademark of [the plaintiff].” See Brookfield Communications, Inc. v. West Coast Entertainment Corp. , 174 F. 3d 1036, 1046 [50 USPQ2d 1545 ] (9th Cir. 1999).

A. Valid, Protectable Trademark

On March 20, 2001, the Patent and Trademark Office (“PTO”), upon application by Storus, registered Storus’ mark Smart Money Clip for use in connection with “cases with clips adapted to hold and retain personal identification, money both paper and coin, credit cards, memo items, business cards, personal accessories, and the like and adapted to be carried in a user’s pocket, purse, handbag or pack.” ( See Kaminski Decl. Ex. D.)

Go to Headnotes [**1R] Here, defendants argue the Smart Money Clip is descriptive, under the theory that “smart” is a “generally laudatory” descriptive term not entitled to protection in the absence of a showing by Storus of secondary meaning. See , e.g. , Hoover Co. v. Royal Appliance Mfg. Co. , 238 F. 3d 1357, 1360 [57 USPQ2d 1720 ] (Fed. Cir. 2001) (holding mark “Number One in Floorcare” was “generally laudatory phrase” not entitled to trademark protection in light of absence of evidence of secondary meaning; noting, “Self-laudatory or puffing marks are regarded as a condensed form of describing the character or quality of the goods.”).

Defendants fail to offer any evidence that “Smart Money Clip” is understood as a “generally laudatory term,” and the cases identifying terms found to be “generally laudatory” concerned marks distinguishable from Storus’ mark. See , e.g. , In re Best Software, Inc. , 58 U.S.P.Q. 2d 1314 (T.T.A.B. 2001) (setting forth as examples of generally laudatory marks “The Best Beer in America” and “The Ultimate Bike Rack”). Defendants also fail to explain why “smart” is descriptive of the function performed by Storus’ money clips, specifically, having the ability to hold cash and credit cards simultaneously. Even assuming, [*1035] arguendo , “Smart Money Clip” is descriptive in nature, the PTO is presumed to have found the mark acquired secondary meaning, see Leelanau , 502 F. 3d at 514 (holding where mark is descriptive, “its registration must have been on the basis of the [] PTO’s determination that [the] mark had obtained a secondary meaning”); consequently, defendants have the burden to “prove the absence of secondary meaning,” see id. Defendants fail to offer any evidence to support a finding of an absence of secondary meaning, and, thus, fail to create a triable issue of fact.

Accordingly, the Court finds Storus has shown no material issue exists as to the validity of the mark Smart Money Clip.

B. Likelihood of Confusion

As noted, Storus argues the manner in which defendants have used “Smart Money Clip” has created “initial interest confusion.”

“Initial interest confusion occurs when the defendant uses the plaintiff’s trademark in a manner calculated to capture initial consumer attention, even though no actual sale is finally completed as a result of the confusion.” Interstellar Starship Services, Ltd. v. Epix Inc. , 304 F. 3d 936, 941 [64 USPQ2d 1514 ] (9th Cir. 2002) (internal quotation and citation omitted). For example, initial interest confusion can occur where a defendant includes a plaintiff’s mark in “metatags” found on the defendant’s website, thereby causing consumers who enter the plaintiff’s mark into a search engine to obtain a list of results that includes the defendant’s website, after which some of those consumers will select defendant’s website from the list. See Brookfield , 174 F. 3d at 1058, 1062-65 (holding “Lanham Act bars [defendant] from including in its metatags any term confusingly similar with [plaintiff’s] mark”). “Although there is no source confusion in the sense that consumers know they are patronizing [defendant] rather than [plaintiff], there is nevertheless initial interest confusion in the sense that, by using [plaintiff’s mark] to divert people looking for [plaintiff’s product] to its web site, [defendant] improperly benefits from the goodwill that [plaintiff] developed in its mark.” See id.

In determining whether a defendant’s use of a mark creates initial interest confusion, a trier of fact considers the eight ” Sleekcraft factors”: “(1) the similarity of the marks; (2) the relatedness or proximity of the two companies’ products or services; (3) the strength of the registered mark; (4) the marketing channels used; (5) the degree of care likely to be exercised by the purchaser in selecting goods; (6) the accused infringers’ intent in selecting its mark; (7) evidence of actual confusion; and (8) the likelihood of expansion in product lines.” See Interstellar Starship , 304 F. 3d at 942. n3 “[I]n the context of the Web, the three most important Sleekcraft factors are (1) the similarity of the marks, (2) the relatedness of the goods or services, and (3) the parties’ simultaneous use of the Web as a marketing channel.” See id. (internal quotation and citation omitted). “When this controlling troika,’ or internet trinity,’ suggests confusion is likely, the other factors must weigh strongly against a likelihood of confusion to avoid the finding of infringement.” Id. (internal quotation, citation, and alteration omitted). Consequently, where the “factors of the internet trilogy” weigh against the defendant, a finding of likelihood of confusion is proper unless the defendant shows the remaining Sleekcraft factors “weigh strongly against a likelihood of confusion.” See Perfumebay.com v. eBay Inc. , 506 F. 3d 1165, 1174-75 [84 USPQ2d 1865 ] (Fed. Cir. 2007); see also GoTo.Com, Inc. v. Walt Disney Co. , 202 F. 3d 1199, 1207 [53 USPQ2d 1652 ] (Fed. Cir. 2002) (holding where “marks are similar, [the parties] offer similar services, and [the parties] both use the web as their marketing channel,” confusion is “indeed likely”).

n4 Defendants offer no evidence to dispute any of the facts set forth in the following section. Defendants have, however, raised evidentiary objections to some of the evidence from which such facts are derived. To the extent the Court has relied on any such evidence, the objections thereto are overruled for the reasons stated by Storus. To the extent the Court has not relied on such evidence, the Court does not reach the objections.

Google Inc., an internet search engine, operates an advertising program titled “AdWords,” under which an account holder can “create ads and choose keywords.” ( See Choi Decl., filed December 28, 2007, Para. 4.) Under this program, “[w]hen people search on Google using one of the account holder’s keywords, the account holder’s ad may appear next to the search results, and people can then click on the account holder’s ad.” ( See id. ) Aroa, an AdWords account holder, chose various keywords for inclusion in the program, including “smart money clip,” and provided Google with an ad to be generated when a user searched using any of the chosen keywords. ( See id. Ex. B at 3, 5.) In particular, under the AdWords program, if a consumer searched on Google for the phrase “smart money clip,” the following Aroa ad may appear on the results page: ( See Andara Decl. Ex. G.) n5 The “Smart Money Clip” portion of the ad is underlined and set forth in a larger font than that used in the rest of the text in the ad. ( See id. )

Smart Money Clip

www.steinhausenonline.com Elegant Steinhausen accessories. Perfect to add to any collection.

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n5 Storus asserts, and defendants do not dispute, that defendants stopped using “smart money clip” as a keyword in the AdWorks program at some point after the instant action was filed. Consistent with Storus’ assertion, documents produced by Google, in the instant action, refer to the “status” of Aroa’s keyword “smart money clip” as “paused,” as opposed to “active.” ( See Choi Decl. Ex. G at 5.)

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During the period from November 13, 2006 to October 12, 2007, the above advertisement was displayed 36,164 times in response to a search for “smart money clip,” and such displays resulted in 1,374 “clicks,” i.e., the consumer “clicked on [Aroa’s] ad after viewing the page where it was displayed.” ( See Choi Decl. Para. 5, Ex. B at 4-5; Andara Decl. Ex. E. at STOR00673-74.)

b. Analysis

Go to Headnotes [**2R] In light of the above undisputed facts, the Court finds Aroa used a mark identical to Storus’ mark with respect to the same type of product, a money clip, and that both Storus and Aroa marketed their respective money clip products over the internet. Defendants’ argument, that the first of the “factors of the internet trilogy,” similarity of the marks, nevertheless weighs in Aroa’s favor, is unpersuasive. Although, as defendants point out, Aroa’s Google ad includes a reference to Aroa’s mark “Steinhausen,” the subject ad, as noted, begins with a mark identical to Storus’ mark, underlined, and in a font size larger than that used for any other text in the ad. Defendants appear to argue that consumers would know Steinhausen is the mark of a company different from that of the company owning the Smart Money Clip mark, and, thus, if consumers proceed to Aroa’s site, the consumers would not be confused as to the source. Defendants offer no evidence, however, to support such a finding. Moreover, even if such evidence had been offered, defendants’ argument would be unavailing. As noted, under the “initial interest confusion” theory of trademark liability, “source confusion” need not occur; rather, in the internet context, the wrongful act is the defendant’s use of the plaintiff’s mark to “divert” consumers to a website that “consumers know” is not Storus’ website. See Brookfield , 174 F. 3d at 1062. n6

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n6 Defendants rely on the concurring opinion in Playboy Enterprises, Inc. v. Netscape Communications Corp. , 354 F. 3d 1020 [69 USPQ2d 1417 ] (9th Cir. 2004), in which Judge Berzon expressed concern that Brookfield was “wrongly decided” and “may one day, if not now, need to reconsidered en banc.” See id. at 1035. Nevertheless, this Court is bound by Brookfield . Moreover, Judge Berzon’s concern pertained to application of the holding in Brookfield to a defendant who, having used the plaintiff’s mark as a keyword, causes consumers to view an internet ad “clearly labeled” as an ad for the defendant. See id. This concern is inapplicable to the instant matter; Aroa’s advertisement is not “clearly labeled” as an ad for Aroa, given that the largest words in the advertisement consist of a mark identical to Storus’ mark.

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Accordingly, the Court finds no triable issue of fact exists with respect to any of the three “factors of the internet trilogy,” each of which weighs in favor of Storus. See Perfumebay.com , 506 F. 3d at 1174. Consequently, the burden shifts to defendants to offer evidence to support a finding that the remaining factors “weigh strongly against a likelihood of confusion.” See id. at 1174-75. [*1037]

In that regard, defendants offer no evidence to show a lack of actual initial interest confusion. The only evidence relevant to this factor is offered by Storus, specifically, undisputed evidence that during the period from November 13, 2006 to October 12, 2007, when Aroa’s ad appeared thousands of times in response to searches for “smart money clip,” such ad generated 1,374 “clicks.” ( See Choi Decl. Para. 5, Ex. B at 4-5; Andara Decl. Ex. E. at STOR00673-74.) In other words, on 1,374 occasions, consumers who were searching for a website by using Storus’ mark were, in fact, “diverted” to an Aroa website selling money clips that compete with Storus’ money clips. Such diversion constitutes the “initial interest confusion” prohibited by the Lanham Act. See Brookfield , 174 F. 3d at 1062, 1065.

Defendants offer no evidence as to their intent in selecting Storus’ mark as a keyword in Google’s AdWords program. Again, the only evidence relevant to such factor is offered by Storus, specifically, evidence that Aroa, before it began using “smart money clip” as a keyword in Google’s AdWords program, had actual knowledge that Storus used the mark “Smart Money Clip” to market money clips. ( See Kaminski Decl. Para. 7.)

With respect to the strength of the Smart Money Clip mark, defendants rely on their argument that Storus’ mark is descriptive and, consequently, weak. “Whether the mark is weak or not is of little importance,” however, “where the conflicting mark is identical and the goods are closely related,” see Brookfield , 174 F. 3d at 1059 (internal quotation and citation omitted), which is precisely the situation presented herein.

Defendants concede the “degree of consumer care” favors Storus, because “consumer care for inexpensive products is expected to be quite low.” ( See Defs.’ Opp. at 14:25-27.) The remaining factor, “likelihood of expansion,” is, in the instant case, “irrelevant” because the goods sold by the plaintiff and the defendant are “related.” See Playboy Enterprises , 354 F. 3d at 1029.

In sum, there is no triable issue with respect to any of the three “factors of the internet trilogy,” and defendants have failed, on behalf of Aroa, to make any showing, let alone the requisite “strong” showing, that the remaining factors weigh against a finding of a likelihood of confusion. Under the circumstances, the Court finds Storus has shown no material issue exists as to a likelihood of confusion by reason of Aroa’s having used Google’s AdWords program in the above-described manner. n7

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n7 The Court makes the same finding irrespective of whether the Court employs a burden-shifting approach as set forth in Interstellar Starship and Perfumebay.com , or considers each factor without burden-shifting. See , e.g. , Playboy Enterprises , 354 F. 3d at 1026-29. As discussed above, the only evidence offered with respect to five of the Sleekcraft factors is undisputed and each such factor weighs in favor of Storus; defendants concede a sixth factor weighs in favor of Storus; a seventh factor is of little importance; and the eighth factor is irrelevant.

At his deposition, Skymall’s Chief Financial Officer, Dick Larson (“Larson”), was asked whether, if a consumer used Skymall’s search engine to search for the term “Smart Money Clip,” a webpage showing one of Aroa’s money clips would come up; Larson responded, “I would expect [Aroa’s] product to come up.” ( See id. Ex. M at 94:10-12.) At her deposition, Skymall’s Customer Service Manager, Jeanette Watte (“Watte”), was asked, “[I]f you typed in Smart Money Clip,’ [*1038] do you believe that based on that search engine it would bring you [Aroa’s] product”; Watte responded, “Today it would, probably.” ( See id. Ex. N at 19:23-20:2.) n8

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n8 Watte’s deposition was taken September 19, 2007. She also testified that “the search functionality [of Skymall’s search engine] has been enhanced so that [customer service employees] can locate products easier.” ( See id. Ex. N at 20:4-8.)

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c. Analysis

With respect to Skymall, Storus’ theory of liability is that if a consumer enters the phrase “smart money clip” in Skymall’s search engine, the consumer would be directed to a page, in what is essentially an electronic catalog, on which Skymall offers for sale an Aroa money clip and on which the words “smart money clip” appear in conjunction with such offer. Put another way, its is Storus’ theory that when a consumer asks if Skymall offers a “Smart Money Clip,” Skymall answers, “yes,” and directs the consumer to a page offering an Aroa money clip. Relying on a claim of initial interest confusion under Brookfield and the above-described deposition testimony offered by Larson and Watte, Storus argues such theory can be established as a matter of law. The Court disagrees.

Go to Headnotes [**3R] Although Skymall conceded having, on July 14, 2005, a webpage containing the phrase “smart money clip” in a description of an Aroa money clip, Skymall has not conceded that, at that time, a consumer who entered “smart money clip” in the Skymall search engine would have been directed to that particular page. All that Skymall conceded, in the above-referenced deposition testimony, is that at present or, at best, at some unspecified time, if a consumer were to enter “smart money clip” in Skymall’s search engine, the consumer would likely be directed to a webpage depicting an Aroa product. n9 Critically, Storus points to no concession by Skymall that such a consumer would be directed to a page containing the phrase “smart money clip,” let alone to a page identical to that found on Skymall’s website on July 14, 2005. Indeed, it appears, from the limited evidence submitted, that a page offering an Aroa money clip will appear as a search result solely because the consumer searches using the phrase “money clip,” irrespective of whether the consumer adds the word “smart” to the search term and irrespective of whether the page contains the word “smart.” ( See id. Ex. M at 93:18-94:9.) Put another way, although the evidence is undisputed that, in July 2005, Skymall’s catalog contained a webpage that included the words “smart money clip,” the record reflects no evidence, or at best a triable issue, with respect to whether, at that time, Skymall had a search engine that would direct consumers to that page if they were to enter the term “smart money clip.” Conversely, although there is evidence that, at the present time, Skymall’s search engine would direct such consumers to a page advertising an Aroa money clip, there is no evidence that, at this time, any such page contains the words “smart money clip.” In sum, the inquiry of Larson and Watte at their respective depositions is too imprecise to support, as a matter of law, the inference Storus seeks to draw.

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n9 A defendant can only be liable for trademark infringement if it engages in an unconsented “use” of another’s mark. See 15 U.S.C. Section 1114(1). Such “use,” in a claim of the type alleged against Skymall, could be proved, e.g., by evidence showing the defendant directs a consumer who searches for “smart money clip” to a webpage on which it offers a competing money clip, and where that page contains the phrase “smart money clip,” either expressly stated thereon or in a metatag. Here, Storus offers no evidence as to how Skymall’s search engine works; specifically, Storus offers no evidence, or even argues, that Skymall’s search engine directs a searching consumer to its pages based on metatags found on those pages, or by some similar mechanism not visible to the consumer by which Skymall itself makes “use” of the mark “smart money clip.” Consequently, based on the record before the Court, Storus can only establish the requisite “use” if it proves Skymall’s search engine directs a consumer searching for “smart money clip” to a page in its catalog that expressly contains the phrase “smart money clip.”

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Accordingly, the Court finds Storus has failed to show no material issue of fact exists as to a likelihood of initial interest confusion based on Skymall’s search engine.

CONCLUSION

For the reasons stated above, Storus’ motion for partial summary judgment of trademark infringement is hereby GRANTED in part and DENIED in part, as follows:

The motion is GRANTED and Storus shall have judgment in its favor as against Aroa on the issue of trademark infringement, specifically, that Aroa’s use of Storus’ mark in connection with Google AdWords is infringing.

1. In the 1980’s in New York, Domenico Santorelli, who is not a party to these proceedings, began selling stainless steel cookware under the brand name Perma-Life®.

2. In 1986, Ki Won (“Jean”) Shim entered into a 50-50 business partnership with Mr. Santorelli whereby they would jointly own and operate the Perma-Life cookware business, including specifically the Perma-Life trademark.

3. In 2002, Ms. Shim purchased from Domenico Santorelli the rights to the Perma-Life trademark and to U.S. Trademark Registration No. 2,029,777 (“the ‘777 Registration”) for the goods of, inter alia, metal cookware, and the goodwill associated with that mark.

4. Since purchasing the rights to the Perma-Life [*2] trademark and associated goodwill of the business from Mr. Santorelli, together Ms. Shim and Plaintiff Partners for Health & Home, L.P. (“Partners”), of which Ms. Shim is the President, have continuously sold stainless steel cookware under the Perma-Life trademark.

6. In reviewing those incoming files, Mr. Voelzke noticed that Mr. Supnick had failed to renew the ‘777 registration and that the time period for filing a late renewal had expired. Mr. Voelzke filed a new trademark application to re-register the Perma-Life trademark.

7. The time period from the time that the PTO officially declared the ‘777 registration lapsed on June 6, 2008, until the day that attorney Voelzke filed the new application on June 8, 2008, was one day.

8. The application filed by attorney Voelzke registered as Registration No. 3,564,113 (“the ‘113 Registration”) on January 20, 2009 for the mark Perma-Life.

9. The ‘113 Registration is a valid and subsisting federal trademark registration for the mark Perma-Life.

10. The period during which [*3] there was no federal trademark registration for Perma-Life owned in whole or in part by Plaintiff, its principal Jean Shim, or a predecessor company in which Jean Shim was part owner, was less than 8 months (from June 6, 2008 until January 20, 2009).

11. In 2009, Ms. Shim assigned both of the registrations, including the goodwill associated with the mark and the right to sue for past infringements, to Plaintiff Partners for Health and Home, L.P. (“Partners”), of which she is the President.

12. At no time from 1986 until the present did Ms. Shim or her companies ever stop selling Perma-Life cookware, whether through her partnership with Domenico Santorelli, through her company Perma-Life Cookware, or through her company Partners.

14. Defendant Seung Wee Yang made all of the managerial decisions for STP.

15. Defendant Seung Wee Yang made all of STP’s marketing and advertising decisions.

16. For several years, Defendant Yang imported “health mattresses” and water purifiers from Korea.

17. From about October 2005 to about April 2007, Plaintiff purchased mattresses and water purifiers from Mr. Yang, [*4] and used its distribution network to sell those products to end customers in America.

18. In January 2008, Mr. Yang began selling stainless steel cookware; he called his new cookware Pearl Life.

19. Defendants sold approximately $400,000 worth of Pearl Life cookware.

20. Defendants’ purchase price for that cookware from the manufacturer was approximately $223,708.

21. Occasionally, Defendants advertised their cookware as being “PEARL-LIFE” (with a hyphen).

22. A significant target market for both Plaintiff’s cookware and Defendants’ cookware is the Korean American community in the Los Angeles area.

23. In their discovery answers, Defendants claimed to be unable to remember any way in which they had ever used Plaintiff’s Perma-Life trademark within their own advertising to sell their competing Pearl Life cookware.

24. In 2006, Mr. Yang registered the domain name www.permalife.co.kr.

25. Mr. Yang placed, or caused to be placed, the metatag “permalife” on the website located at www.permalife.co.kr.

26. Mr. Yang placed the www.permalife.co.kr domain for sale by stating on that website that the domain was “For Sale.”

27. On July 9, 2008, Mr. Yang registered a second Korean domain, www.perma-life.co.kr.

28. [*5] Mr. Yang admitted in deposition that in early 2007 his relationship with Ms. Shim fell apart; then more than a year later, he registered the domain www.perma-life.co.kr and linked it to his www.pearllife.com website (framed that website) from which he advertised his Pearl Life cookware; then later he put the www.perma-life.co.kr domain up for sale, all without ever telling Ms. Shim that he had done those things.

29. Mr. Yang repeatedly denied in this litigation that Exhibit 4 to the Complaint, which showed the domain www.perma-life.co.kr being used to promote Mr. Yang’s own Pearl Life cookware, was an accurate representation of what the website at www.perma-life.co.kr looked like.

30. Mr. Yang admitted in deposition however, that Exhibit 3 to the deposition (which is identical to Exhibit 4 to the Complaint) was an accurate representation of what www.perma-life.co.kr looked like.

31. Mr. Yang admitted in deposition that he had caused the domain www.perma-life.co.kr to be “linked” or “forwarded” to his “home page” at www.pearllife.com.

32. Contrary to his deposition testimony, Mr. Yang did not actually stop linking (framing) www.perma-life.co.kr to his own Pearl Life website until at least [*6] October 2009.

33. Mr. Yang repeatedly denied in this litigation that he had caused the metatags “perma-life” and “perma life” to be placed on the website at www.perma-life.co.kr.

34. That source code for the website www.perma-life.co.kr contained the terms “perma life” and “permalife” as metatags.

35. Mr. Yang instructed his website designer, Steven Kim, to place “perma-life” as a metatag on that website.

36. Mr. Yang posted videos on the Internet promoting his Pearl Life cookware to which he applied Plaintiff’s Perma-Life trademark as visible tags (indexing tags); he posted such videos on the video sharing sites YouTube (www.youtube.com), and Tag Story (www.tagstory.com), and on his “blog” at Daum (www.daum.net).

37. Mr. Yang’s intent in applying Plaintiff’s Perma-Life trademark as indexing tags for videos was to divert consumers who were looking for Plaintiff’s Perma-Life cookware on the Internet to his www.pearllife.com website from which he sold his Pearl Life cookware.

38. In their Answers, Defendants denied having purchased “PERMA-LIFE” as a search engine advertising keyword.

39. Mr. Yang, however, did in fact purchase from Google, Inc. the term “permalife” as an Internet search engine [*7] advertising keyword.

40. In sum, Defendants used Plaintiff’s Perma-Life trademark in the following ways: (1) as a domain name through which they framed their www.pearllife.com website at which they promoted their competing Pearl Life cookware; (2) as metatags on their websites at which they promoted their Pearl Life cookware; (3) as Google Internet search engine advertising keywords to direct consumers to their www.pearllife.com website; and (4) as visible video tags which act as indexes on their videos which they posted at various Internet video sharing websites including at least YouTube (www.youtube.com) and Tag Story (www.tagstory.com), and at a “blog” site at Daum (www.daum.net).

41. Defendants posted on their www.pearllife.com website a large photograph of Defendant Yang shaking hands with the original founder of Perma-Life cookware, Domenico Santorelli, and text below the photograph stating that Defendants entered into an “agreement” with Mr. Santorelli, falsely implying a connection between Defendants and Plaintiff’s Perma-Life cookware.

42. Defendants never sold any Perma-Life cookware.

43. The text accompanying the photograph states that the company [i.e., the company formerly [*8] selling Perma-Life] has changed names to “New Life” and is now being operated by Mr. Santorelli’s daughters.

44. Ms. Shim sold Perma-Life cookware continuously from 1986 to the present.

45. A significant number of consumers have actually been confused between Pearl Life and Perma-Life, and/or between Plaintiff and Defendants.

46. Defendants did not seek advice of counsel before using Plaintiff’s Perma-Life trademark to promote their own Pearl Life cookware, nor did they seek advice of counsel on that issue even after this action was initiated against them.

47. Defendants did not respond to numerous cease-and-desist demands from Plaintiff that Defendants stop using Plaintiff’s Perma-Life trademark in their advertising.

48. Any Conclusion of Law hereafter determined to be an undisputed fact is hereby made an undisputed fact.

CONCLUSIONS OF LAW

1. Any finding of fact which is hereafter determined to be a conclusion of law is hereby made a conclusion of law.

2. This Court has jurisdiction over the subject matter of this action under 28 U.S.C. §§ 1331 and 1338 and 15 U.S.C. § 1121.

3. HN1Go to the description of this Headnote.Summary judgment or partial summary judgment is appropriate when there is no genuine issue as to any material fact [*9] and the moving party is entitled to judgment as a matter of law. FED. R. CIV. P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986).

4. HN2Go to the description of this Headnote.Summary judgment may be granted when “no reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). HN3Go to the description of this Headnote.The court must afford all reasonable inferences and construe the evidence in the light most favorable to the non-moving party. See id. at 255. HN4Go to the description of this Headnote.To defeat summary judgment, the evidence as properly construed must be sufficient for a reasonable jury to find for the nonmoving party; a mere scintilla of evidence will not suffice. Id. at 252.

6. [*10] HN6Go to the description of this Headnote.This is particularly true when a single individual is the corporation’s sole shareholder, sole officer, and sole manager, and performs the infringing acts himself; that person will be individually liable for the intellectual property infringements committed by the corporation. Playboy Enterprises Inc. v. Chen, 45 U.S.P.Q.2d 1400, 1412 (C.D. Cal. 1997). Such personal liability does not depend on piercing the corporate veil. Id.

7. Defendant Yang as sole shareholder, sole officer, sole manager, the sole individual responsible for advertising for Defendant S T P America, Inc., and the person who personally committed the acts relevant to this action, is personally liable for all of those acts.

8. Plaintiff’s trademark was federally registered from September 2, 1997 to June 6, 2008 as U.S. Trademark Reg. No. 2,092,777, and was federally registered as U.S. Trademark Reg. No. 3,564,113 from January 20, 2009 to the present.

9. At all relevant times, Plaintiff also had common law trademark rights and rights under the Lanham Act § 43(a), through continuous use in commerce, of the Perma-Life mark.

10. HN7Go to the description of this Headnote.Under 15 U.S.C. § 1125(d)(1)(A), the Anti-Cybersquatting Consumer Protection Act (ACPA), a person [*11] is civilly liable for cyberpiracy (aka cybersquatting) to a trademark owner if that person (i) “has a bad faith intent to profit from a mark . . . and (ii) registers, traffics in, or uses a domain name that . . . in the case of a mark that is distinctive at the time of registration of the domain name, is identical or confusingly similar to that mark.” Id. The statute lists nine non-exclusive factors to be considered in deciding whether the domain registrant acted in “bad faith.” Those factors are:

HN8Go to the description of this Headnote.(I) the trademark or other intellectual property rights of the person, if any, in the domain name;

(II) the extent to which the domain name consists of the legal name of the person or a name that is otherwise commonly used to identify that person;

(III) the person’s prior use, if any, of the domain name in connection with the bona fide offering of any goods or services;

(IV) the person’s bona fide noncommercial or fair use of the mark in a site accessible under the domain name;

(V) the person’s intent to divert consumers from the mark owner’s online location to a site accessible under the domain name that could harm the goodwill represented by the mark, either for commercial gain or with the intent [*12] to tarnish or disparage the mark, by creating a likelihood of confusion as to the source, sponsorship, affiliation, or endorsement of the site;

(VI) the person’s offer to transfer, sell, or otherwise assign the domain name to the mark owner or any third party for financial gain without having used, or having an intent to use, the domain name in the bona fide offering of any goods or services, or the person’s prior conduct indicating a pattern of such conduct;

(VII) the person’s provision of material and misleading false contact information when applying for the registration of the domain name, the person’s intentional failure to maintain accurate contact information, or the person’s prior conduct indicating a pattern of such conduct;

(VIII) the person’s registration or acquisition of multiple domain names which the person knows are identical or confusingly similar to marks of others that are distinctive at the time of registration of such domain names, or dilutive of famous marks of others that are famous at the time of registration of such domain names, without regard to the goods or services of the parties; and

(IX) the extent to which the mark incorporated in the person’s domain name [*13] registration is or is not distinctive and famous within the meaning of subsection (c).

15 U.S.C. § 1125(d)(1)(B).

11. HN9Go to the description of this Headnote.It does not matter whether a trademark is a “dot com” or has a “dot country code” at the end, in a case such as this in which the defendant resides in the United States, the trademark owner resides in the United States, and the domain is accessed by United States customers. See Playboy Enterprises, Inc. v. Chuckleberry Pub., Inc., 939 F. Supp. 1032 (S.D.N.Y. 1996) (holding defendants in contempt of court for registering and operating Italian domain www.playmen.it accessible by U.S. customers in violation of ACPA, where defendants had previously been adjudged to be infringers of the PLAYMEN trademark and had been ordered to cease infringing that mark).

12. Plaintiff is entitled to summary adjudication of cyberpiracy against Defendants with respect to Defendants’ registration and attempts to sell the domain www.permalife.co.kr.

13. Plaintiff is entitled to summary adjudication of cyberpiracy against Defendants with respect to Defendants’ registration and use of the domain www.perma-life.co.kr to promote and sell Defendants’ Pearl Life cookware.

14. HN10Go to the description of this Headnote.It is an infringement of [*14] a trademark to use in commerce any sufficiently similar word or device such that consumers are likely to be deceived regarding the source, affiliation, or sponsorship of the goods being offered for sale. See 15 U.S.C. § 1114(1) (infringement of a registered trademark) and 15 U.S.C. § 1125(a) (Lanham Act § 43(a), false designation and false descriptions, regardless of whether a registered mark is involved).

15. HN11Go to the description of this Headnote.The core element of trademark infringement is whether customers are likely to be confused about the course or sponsorship of the products.

(6) the degree of care customers are likely to exercise in purchasing the goods;

(7) the defendant’s intent in selecting the mark; and

….

18. HN14Go to the description of this Headnote.In the Internet context, the three most important Sleekcraft factors in evaluating a likelihood of confusion are:

(1) the similarity of the marks,

(2) the relatedness of the goods and services, and

(3) the parties’ simultaneous use of the Web as a marketing channel.

Perfumebay.com, 506 F.3d at 1173.

19. HN15Go to the description of this Headnote.When these factors suggest that confusion is likely, the other factors must weigh strongly against a likelihood of confusion to avoid the finding of infringement. On the other hand, if these three factors do not clearly indicate a likelihood of consumer confusion, then a district court can conclude the infringement analysis only by balancing all the Sleekcraft factors within the unique context of each case. Perfumebay.com, 506 F.3d at 1173-74 (citations and internal quotations omitted).

22. “[E]vidence that the use of the two marks has already led to confusion is persuasive proof that future confusion is likely.” GoTo.com. Inc. v. Walt Disney Co., 202 F.3d 1199, 1208 (9th Cir. 2000) (quoting Sleekcraft, supra).

23. HN18Go to the description of this Headnote.The person using another’s trademark in commerce bears the burden of demonstrating that the use of the trademark is authorized by law, i.e., is a fair use. See 15 U.S.C. § 1115(b).

24. HN19Go to the description of this Headnote.As a general rule, using another party’s trademark on an Internet website without authorization, and without legal justification, constitutes trademark infringement per se. See, e.g., Australian Gold, Inc. v. Hatfield, 436 F.3d 1228, 1238, 77 U.S.P.Q.2d 1968, 1972 (10th Cir. 2006).

25. HN20Go to the description of this Headnote.”Initial interest confusion” occurs when a user is initially attracted to a defendant’s website or products based on an initial impression [*17] that the defendant sells the trademarked product, even if that user eventually realizes before purchasing that the products being offered are not the trademarked goods. Using another’s trademark or a similar trademark in a way that causes initial interest confusion is one type of trademark infringement, and is actionable. Australian Gold, supra, 436 F.2d at 1238-39, 1240.

29. HN24Go to the description of this Headnote.Because bad faith intent to profit from another’s trademark is a necessary element of a claim for cyberpiracy under the ACPA, using a domain that incorporates another’s trademark in a way that is also likely to create consumer confusion also constitutes willful trademark infringement.

30. Defendants have infringed Plaintiff’s Perma-Life trademark by each of the following acts, taken either individually or as a whole:

a. Registering the domain www.perma-life.co.kr and using it to promote their competing Pearl Life cookware;

b. Applying the metatags “perma life” and “permalife” to the website at www.perma-life.co.kr through which they sold their competing Pearl Life cookware;

c. Applying the term “permalife” as visible video tags (indexes) on videos promoting Pearl Life cookware which they posted on the Internet at video sharing websites YouTube (www.youtube.com) and Tag Story (www.tagstory.com), and on the “blog” site Daum (www.daum.net).

d. Purchasing the term “permalife” as an Internet search engine advertising keyword to direct Internet users to their website at www.pearllife.com at which they advertised their Pearl Life cookware.

31. HN25Go to the description of this Headnote.Failure to seek a legal opinion of counsel as to infringement, especially after receiving a cease-and-desist letter, is probative evidence of an infringer’s willfulness. Pfizer Inc. v. Sachs, 652 F. Supp. 2d 512, 523, 92 U.S.P.Q.2d 1835 (S.D.N.Y. 2009).

32. The marks “Pearl Life” and “PEARL-LIFE,” when applied to the goods of stainless steel cookware, are confusingly similar to PERMA-LIFE for stainless steel cookware.

34. Defendants are liable for violating the Lanham Act § 43(a), for the same reasons as they are liable for trademark infringement.

35. Defendants are liable for violating the Lanham Act § 43(a) for the additional reasons that they:

(a) falsely told consumers that PEARL LIFE cookware is the same cookware as PERMA-LIFE cookware;

(b) falsely told consumers that their company is the same company as Plaintiff.

36. HN27Go to the description of this Headnote.Trademark infringement under 15 U.S.C. § 1114(1) also constitutes trademark counterfeiting when the infringer uses a “counterfeit mark,” which is defined as “a counterfeit of a mark that is registered on the principal register of the United States Patent and Trademark Office for such goods or services sold, offered for sale, or distributed and that is in use . . . .” 15 U.S.C. § 1116(d)(1)(B)(i).

37. Defendants’ use of Plaintiff’s trademark in the various [*21] ways listed above constitutes trademark counterfeiting. See Aztar Corp. v. MGM Casino, 59 U.S.P.Q.2d 1460, 1463 (E.D. Va. 2001) (finding defendants liable for both cyberpiracy and trademark counterfeiting, where defendant registered a domain name that incorporated plaintiff’s trademark exactly, and used that trademark in visible text on the website as the name of that website).